ACCF: US climate pledge falls short of GHG reduction targets

According to a new report by the American Council for Capital Formation (ACCF), ‘Success Of US Climate Pledge Depends On Future GHG Regulation Of US Industry, Other Sectors’, a substantial gap exists between the US climate pledge to the United Nations – or US Intended Nationally Determined Contribution (INDC) – and President Obama's 2025 target of a 26 - 28% reduction in greenhouse gases (GHGs), compared to 2005. Consequently, future greenhouse regulation of other sectors, including industry (i.e. cement, chemicals, paper, refining, and steel) and agriculture/land use, is likely, particularly with a democratic presidential victory next year. Taking unilateral US domestic action, without an effective global approach, would certainly have a negative impact on the competitiveness of US manufacturing.

"While the White House claims that the US is on track to meet the President's reduction targets, the numbers behind the policies listed in the US climate pledge tell a much different story," said ACCF Executive Vice President George David Banks. "The only way the US can meet its pledged international targets is to saddle US manufacturing with stringent GHG reduction targets that will likely harm jobs and economic growth."

The ACCF report highlights a series of questions and answers related to the US INDC as well as independent analyses on the gap that were conducted by a number of politically diverse groups including environmental organisations and the U.S. Chamber of Commerce.

While the US INDC fails to provide specific details on all IPCC sectors (e.g. cement and steel), it does include several policies and measures that focus on reducing emission levels in power generation, transportation, and from other smaller sources. Those policies identified in the INDC produce likely emissions reductions of 11 - 17%. Thus, there is a notable gap of 9 - 15%, considering the 26% INDC target.

The ACCF cites a World Resources Institute (WRI), which determined that "[A]ctions taken to implement the [Climate Action Plan] are not enough to get the United Statesto its 2020 or 2025 climate goals. To meet these goals, the country will need to strengthen and expand some of the actions already taken or proposed, and take action on additional sectors not yet addressed."

The aggressive regulation of industry alone probably could not fill the US INDC gap. The US would also likely need to regulate other sectors, including land use and agriculture, to meet President Obama's target.

"Environmental groups and industrial interest agree that this gap will need to be filled in order to meet the President's target," Banks said. "Adding these new requirements to an already increasing list of regulations would slow the growth of industry and decrease the sector's global competitiveness, which would result in slower GDP and job growth. Because this pledge will be inherited in the next administration and beyond, it should be a centerpiece economic policy discussion in the 2016 election."

Banks surmises that the Obama administration is likely to spend its remaining time after the Paris international climate meetings working toward a global approach for each major industrial sector to help mitigate political criticism and the foreseeable negative impact on US industry.

"Creating a global approach that covers a critical mass of emissions in each industrial sector with comparable monitoring, verification, and enforcement across major economies will be incredibly difficult – if not politically impossible," Banks added. "In particular, environmental governance in developing countries is simply not at a level at this time that would give US industry and labour unions any real confidence."

Greenhouse gas emission policies are rapidly changing, and the refining industry is concerned that profitability is under threat in a carbon capped environment. This article briefly outlines the current situation and considers the future.